I'm a little confused and want to double-check that I understand the Roth IRA correctly.
If I have self-employment income, my earned income is the Net Profit on Schedule C line 31 (also the amount on Schedule 1 line 3) minus 1/2 the SE tax (the amount on Schedule 1 line 15) and I don't have to worry about the combined amount on line 10 entered on Form 1040 Line 8 ("Other income from Schedule 1, line 10"), right?
I'm confused since it reads like part of earned income is entered on the 1040, "other income" line. I've never questioned this before since I used CPA to file my taxes until now and this is my first time trying TT. When I go through the process, it keeps entering my 1099-NEC as self-employed/other income and gives me a warning that I exceeded the contribution limit because I have a $0 earned income.
Before I solve the current issue, I'm worried because I only looked at the number on Schedule C line 31 minus 1/2 SE tax until now. I never looked at or questioned Form 1040 line 8 in previous years. Am I okay as long as I had Schedule C with the right amount shown on line 31?
1099-NEC is my only income.
Thanks.
